1 in 7 mutual fund dollars put in bank-managed fund

Bank-managed mutual funds are enjoying an unprecedented run of popularity with financial consumers.

As of mid-year 1999, nearly one out of every seven mutual fund dollars is invested in a bank-managed fund, according to the most recent data from Lipper Analytical Services.

That's up significantly from 1993, when just one out of every 10 dollars was invested in a bank-managed fund.

Performance and convenience seem to be what's drawing new financial customers to bank-managed funds, industry experts say.

Since 1994, bank-managed mutual funds have returned 15.93 percent annually as compared with 14.16 percent annually over the same period by non-bank funds, according to a September 1999 study from CDA Wiesenberger.

While average investors are likely unaware of industry-wide performance figures, they know how their own bank-managed funds are doing and presumably enjoy the recent results they've generated.

For example, two equity funds from The Commerce Funds, managed by the Commerce Bank Investment Management Group, have had consistent, long-term performance across asset classes while attracting many new investors.

Besides positive performance, buyers of bank-managed funds seemingly like the convenience of consolidating their finances with a single institution, the numbers show.

Before selecting bank-managed mutual funds, investors should work with a financial adviser. Advisers will help investors determine their investment objectives and risk tolerance.

(Shareen Beal is vice president of Commerce Brokerage Services Inc.)